Smallpox results from infection with the poxvirus Variola. While the WHO has eradicated smallpox worldwide through vaccination programs, clandestine stores of Variola Virus still pose a potential threat from terrorist initiated biowarfare. Vaccination for smallpox is achieved through inoculation with Vaccinia virus, a highly related poxvirus. While Variola infection is pathogenic and fatal in 30-40% of infected individuals, Vaccinia is immunizing and usually not associated with disease. There is no effective treatment for Variola infected patients. Identifying and working with potential targets for treatment of smallpox is thus important. However, work with Variola virus is not possible for both public safety and ethical concerns. The Vaccinia virus phosphatase, VH1, is critical for viral replication and may also play an important role in evasion of host defense during infection, possibly by interfering with the innate immune response stimulated by interferons. This phosphatase is conserved in most poxviral genomes, including Variola. Our goal in this project is to characterize the Vaccinia VH1, and by using site-directed mutagenesis to generate the smallpox phosphatase, compare the function of the Variola virus counterpart for their role in evading host defense. Our hypothesis is that the Variola phosphatase will function more efficiently than the Vaccinia counterpart and may contribute to the pathogenicity of Variola infection. Variola phosphatase may also offer an attractive target for pharmaceutical intervention of smallpox infection. The goals of this project will be achieved by examining the effects of Vaccinia and Variola phosphatase function on signaling and transcription factor activation, cytokine induced gene transcription and biological functions including cytokine production and antigen presentation. These studies will complement other projects in the Program that also examine aspects of poxvirus subversion of antigen presentation during infection. Our project examines one poxviral protein for its effects while other projects focus on whole virus. Thus, for a subset of viral responses, our studies may provide mechanism for poxviral-mediated alterations in antigen presentation. Overall, these studies will increase our understanding of poxvirus biology and poxvirus mediated immune evasion.